Distribution Agreements Which Limit Sales by Customer or Territory

question 280

Multiple Choice

Distribution agreements which limit sales by customer or territory:

• A) are always illegal.
• B) may be legal if they are horizontal agreements between producers and intermediaries.
• C) are definitely illegal if they are horizontal agreements among competing producers or intermediaries, but may be legal if they are vertical agreements.
• D) are definitely illegal if they are vertical agreements between producers and intermediaries.
• E) None of these alternatives is correct.

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Definitions:

Short Run

A period in economics during which some factors of production and costs are variable, while others remain fixed.

Long Run

In economics, a period in which all factors of production and costs are variable, allowing for full adjustment to changes.

Profit

The financial gain achieved when the amount earned from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity.

Loss

An economic condition where expenses exceed revenues, resulting in negative profit.